TCS, Infy and Wipro banking on non-linear growth

Bangalore: The three IT giants of India, TCS, Infosys and Wipro are looking for non-linear ways of growing their revenues to ensure that they don't have to hire more in order to serve additional customers, and handle higher volumes of projects. Together, the country's top three tech firms already employ over 3,00,000 staff between them, and pursuing non-linear growth is on top of their agenda, according to Economic Times.

Wipro had started its non-linear journey two years back ago in an abandoned computer making unit, owned by the company's hardware division at Mysore, which has now evolved as its global services management centre. The centre caters to over 85 customers with around 1,000 staff. "To some extent, only Wipro has tried to break the one-to-one correlation between revenue growth and employee addition as it so demonstrated through financial year 2009 (FY09) - an effort initiated before the crisis intensified in September 2008 with the collapse of Lehman Brothers," said Edelweiss analysts Viju George, Kunal Sangoi and Pratik Gandhi.

When Suresh Vaswani, Wipro's Joint Chief Executive, was looking for service lines to start a pilot for testing non-linearity, the company's growing hardware management business or infrastructure outsourcing, appeared to be a safe bet. By moving management of desktops, servers, end user devices and communication infrastructure to a remote location, Wipro wanted to see if non-linearity could be applied to other businesses as well. "Managed infrastructure services offered tremendous opportunity for automation, remote delivery and utilisation of different required tools," Vaswani said. "Having seen early results, we are now committed to make this a big movement for us, internally."

In the last two years Wipro has grown its revenues from infrastructure outsourcing business at over 40 percent and has increased its work force delivering such services by less than 10 percent. Overall, Wipro added around 845 employees during the year ended March 2009 and grew its technology services revenues by over 20 percent. While TCS added around 32,000 employees during 2008-09 and grew revenues by 18 percent, country's second biggest software exporter Infosys increased its yearly revenues by 11.7 percent and added 13,663 employees during the same period. Increased automation and use of same platform for delivering services to multiple customers can help the companies bring down additional number of staff required by over 40 percent, Vaswani added.

Wipro has started offering platform-based services to customers using SAP, Oracle and other enterprise software applications. "Acceptance does take a while with global customers, but we already have some 8-10 pilots going for clients," said Deepak Jain, Vice-President, Technology Infrastructure Services, Wipro Technologies. "Obviously, there is more acceptability during this downturn."

Wipro is surely not alone in pursuing non-linearity. Larger rival TCS, according to experts, is working hard to have more reusable components across different software engineering processes. "TCS' two-three year goal is to ensure coverage of 100 percent of its strategic accounts to deploy these tool-kits," the Edelweiss analysts said. "TCS claims that cost savings from well-proven components can typically generate cost savings of 30-40 percent through re-use," they added.

Even Infosys sees more traction in business from shared services platforms, wherein customers such as Royal Philips are paying the company for every transaction processed, irrespective of the number of staff employed by Infosys. "We are already offering complete human resource services based on Oracle platform to customers, wherein pricing is based on number of employees," said S Gopalakrishnan, Chief Executive Officer of Infosys.